Wednesday, April 30, 2008

City agreement allows FCR to build 44% smaller Phase 1; what about NYC's extra $105M?

Despite assertions by Forest City Ratner officials that “all of Atlantic Yards... will be built," the State Funding Agreement, which the Empire State Development Corporation (ESDC) quietly released last month, gives the developer 6+ years to build the arena, 12+ years to build the five towers in Phase 1, and an unspecified amount of time to build the 11 towers in Phase 2.

A look at the previously-unreleased City Funding Agreement signed last September shows the developer has an even gentler deal: modest penalties for delay, plus allowance for a much smaller Phase 1 than that outlined in the General Project Plan passed by the ESDC in December 2006.

(I obtained the City Funding Agreement from the New York City Economic Development Corporation, or NYCEDC, via a Freedom of Information Law request. Warning: 13+ MB.)

The City Funding Agreement involves NYCEDC and ESDC, while the state agreement involves ESDC and the developer. There's considerable overlap between them. (Click on all graphics to enlarge.)
  • The city agreement casts further doubt on the schedule for affordable housing units, perhaps the main generator of political support for the project.

  • It includes no penalties as long as the developer builds, within 12+ years, 1.5 million square feet in Phase 1--some 44% smaller than promised less than a year earlier.

  • It permits a scenario of only 300 affordable housing units by 2020

  • With such a smaller Phase 1, it further reduces expected tax revenues.

  • It does not address the city's $105 million contribution for infrastructure, raising the possibility that, upon the project's demise, the city could recover only its initial $100 million outlay.

  • It confirms that the initial $100 million--once intended at least in part for infrastructure--will be used to reimburse Forest City Ratner for the seemingly generous checks the developer wrote to owners of properties destined for the arena footprint.

  • It requires larger penalties for a delayed arena than a delayed Phase 1, suggesting that the arena is more of a priority.

  • It sets a schedule for relatively modest penalties; an arena three years late (given the grace period), delayed to 2018, likely would cost the developer little more than $10 million in damages to the city.

  • Such relatively modest penalties also apply to Phase 1 delays; should the Phase 1 site lie fallow until 2027--nearly two decades from now--the six-year delay (given the grace period) likely would cost the developer only $17 million in damages to the city.

  • It also poses relatively small penalties if FCR abandons the project within three years; that suggests that a decision to pull the plug, should it be made, would come sooner rather than later.
City amplification?

Given the issues raised by the document, I posed several queries to NYCEDC. Agency spokeswoman Janel Patterson provided some limited factual answers, but cautioned, "Questions involving hypotheticals or processes are not topics we can address."

Those topics, however, are important, because they shape the incentives and pressures on the developer. Perhaps they’ll come up if the City Council addresses Atlantic Yards in an oversight hearing. For now, increases in construction costs and losses by the Nets basketball team may be more significant costs calculated by the developer.

(Note that, while Phase 1 has in the past been used to define the Arena, the four towers around it, plus the tower at Site 5, in this case, Phase 1 is defined as those first five towers.)

Oversight coming?

Indeed, when I summarized my findings for City Council Member Letitia James, the project's leading political opponent, she said she had no knowledge of the agreement. She said that both the Council's Contracts Committee, which she chairs, and the Economic Development Committee should look into the deal.

"I’m shocked that liquidated damages are higher" for an arena delay than for a Phase 1 delay, James said. "And why is the penalty so minimal?"

Also, given that the State Funding Agreement, in certain circumstances, would require repayment of state funds advanced for infrastructure, so should the City Funding Agreement, she concluded.

Is there a separate agreement between NYCEDC and Forest City Ratner regarding that $105 million contribution for infrastructure? There's no reference to it in either the city or state funding agreements, which raises the question of whether the city could ever get some of that money back.

"There is no such agreement at this time," Patterson replied, which could mean 1) they're working on it or 2) they forgot about it.

City oversight might fulfill some language in the document, a contract between NYCEDC and ESDC, which states somewhat conclusorily, “Whereas, the City and NYCEDC have determined that it is in the best interest of the people of the City that ESDC undertake the Project and desire to fund ESDC for the Land Acquisition Costs.”

While the City Council did authorize the $205 million in the budget, there was no vote or debate in City Council over the project as a whole.

A smaller Phase 1

Though the entire project was "anticipated" in the ESDC's General Project Plan to take ten years, the State Funding Agreement revealed that Forest City Ratner has six years after the close of litigation and the delivery of property via eminent domain to build the arena, and 12 years to build Phase 1 of the project before penalties--repayment of yet-unspecified portions of the state's $100 million in funding, plus liquidated damages to the city--kick in.

The City Funding Agreement grants even more slack, since it defines “Substantial Completion” of Phase 1 as the construction of at least 1.5 million square feet within those 12 years.
That’s 44% less space than that the 2.69 million square feet “expected” in the General Project Plan (right) approved by the ESDC in December 2006.

(How many buildings is 1.5 million square feet? According to a document in the General Project Plan delineating maximum building heights and square footages, the two largest towers, including Building 4, at the southwest corner of Sixth and Atlantic avenues, and the flagship Miss Brooklyn, conceivably could meet the 1.5 million sf minimum. However, that’s now unlikely, since Miss Brooklyn already seems to have been reduced. The city and state agreements incorporate a document that defines Phase 1 as five towers. Thus, the required 1.5 million square feet could mean five smaller towers. Or it could mean three towers completed within 12 years, with the other two completed at some later date.)

While a smaller Phase 1, once completed, should have less of an impact on traffic and transit, a longer buildout might cause other complications, such as from continued construction.

I asked NYCEDC’s Patterson to “explain the rationale for agreeing that building no more than 1.5M sf generates no penalty,” but was told that was among the topics they can’t address.

Less affordable housing


A smaller Phase 1 likely would bring less affordable housing, given the requirement that 30% of housing built in Phase 1 be affordable.

Given the timetable allowed in the State Funding Agreement, Forest City Ratner could, without penalty, build fewer than 300 affordable units--and only 120 low-income units--over 12 years. (That 12-year endpoint, in a best-case scenario, could be 2020 if litigation clears later this year and properties are delivered via eminent domain, but more likely would come a year or two later.)

How do I calculate 300 units over 12 years? For simplicity’s sake, I assume 500,000 square feet devoted to office space and 1 million square feet of housing. (Actually there’d be some space for retail and possibly a hotel; right now, the developer describes Miss Brooklyn as an office tower with 528,000 sf of zoning rights, though no anchor tenant has emerged.)

If 1 million square feet of housing means 1000 units (at 1000 square feet per unit), 30% of that would result in 300 affordable units. Of the 300 affordable units, 40% would be low-income.

Lower revenues

A smaller Phase 1 would mean lower revenues than the figures predicted in state documents. The state estimates presumed a project built within ten years. The slow buildout permitted in the state document--6+ years for the arena, 12+ years for Phase 1--was the first step in lowering the revenues.

The agreement that "Substantial Completion" of Phase 1 requires only 1.5 million square feet further diminishes such expected revenues.

The missing $105 million

Should the arena or Phase 1 be delayed, the developer would have to pay a schedule of liquidated damages, which I’ll discuss below. Should the project be abandoned, the City Funding Agreement, oddly enough, apparently requires repayment of only the initial $100 million promised by the city.

The document makes reference to “City Funding” of $100 million, defining it narrowly as funds used to help the ESDC buy the arena site--essentially, to reimburse Forest City Ratner for purchases already made. It does not offer a more commonsense definition of “city funding,” which presumably includes the $105 million added in 2007, leading the city to summarize (right) contributions as $205 million.

While the State Funding Agreement requires the developer, should the project be delayed or abandoned, to repay portions of the $100 million in state money advanced for infrastructure, the City Funding Agreement requires the repayment of only the initial $100 million, which the agreement defines as “Disbursements.”

So it may be that the additional $105 million, which like the ESDC’s payments, is directed at infrastructure, would not have to be repaid. Or, as Patterson's cryptic statement left open, another agreement may be under discussion.

Money for infrastructure, not benefit FCR?

Does that additional $105 million benefit just this project, or the neighborhood in general? City officials have suggested the latter. In January 2007, Deputy Press Secretary John Gallagher explained, "The additional funding is for infrastructure improvements, several of which would have been required with or without the construction of the Atlantic Yards Development and others that are necessary regardless of what is built on the site."

Mayor Mike Bloomberg, according to the Brooklyn Paper, attributed the higher allocation to the “rising cost of cement and steel,” adding “We have a commitment to pay for infrastructure costs and we will meet that commitment."

Doug Turetsky of the Independent Budget Office suggested to Neil deMause of the Village Voice that the city's additional expenditures were not generic: "some of which might have been on the books prior to Atlantic Yards, but some substantial amount of which is likely related to the scale of the project—such as the need for expanding sewer and water capacity."

In other words, maybe some of the money does benefit the developer. After all, Forest City Ratner officials apparently agree. Executive Joanne Minieri told investment analysts earlier this month:
We have executed the funding agreement with the city and state for the $200 million of subsidy and received an additional $105 million allocation from the city.

And executive Chuck Ratner of parent Forest City Enterprises followed up:
[J]ust in these past six or eight months, we got the various governmental agencies, state, city, borough, in New York, to increase their commitments to Atlantic Yards by 105 million dollars on top of the 200 [million] they committed. We still need more.


City contribution: infrastructure, property

The use of all $100 million to buy property was not explicitly contemplated in the nonbinding Memorandum of Understanding (MOU) signed in 2005. It stated (p. 5), The City’s capital contribution shall be used for the same purposes as the ESDC’s capital contribution [site preparation and public infrastructure improvements], except that the City's capital contribution may also be used to fund a portion of the costs of acquisition of the Arena Site (other than the MTA Properties).
(Emphasis added)

That suggests that city funds would be used for both infrastructure and property acquisition. The word “except” allows the city to use its capital contribution for property acquisition, but the phrase "may also" suggests that the $100 million would not be used exclusively to buy property. But the MOU was not binding.

(Last year, an NYCEDC spokeswoman said the MOU “had always included the possibility of buying land, as well as improving the infrastructure,” according to the Daily News. True, but it didn’t suggest that it would be used only to buy land.)

The “portion” of the costs for acquisition of the arena site comprises a large majority of those costs. While the city has advanced $100 million, plus a token $10 (above and right), another page included in the funding agreement (below) cites $103.5 million as the aggregate cost so far for properties on the planned arena block: Dean and Pacific streets, and Sixth and Atlantic avenues.

A few buildings and one condo are still not owned by Forest City Ratner, and some buildings owned by the developer have tenants with rent-stabilized leases who are suing the state. The cost of purchasing the extant buildings, either through negotiation or via eminent domain, as well as potentially settling with the tenants, would presumably be added to the aggregate cost.

"Stop Payment"

Some Brooklyn City Council members, at a hearing in March 2007, expressed dismay that city money would go to property acquisition, not infrastructure. And citizen groups at a protest last June made the same point, calling for “Stop Payment.”

The potential for a subsidy request greater than $200 million initially pledged by the city and state should’ve been evident to city officials well before the MOU was signed 2/18/05. Seven months earlier, as I reported, a 6/28/04 business plan submitted by FCR indicated that infrastructure and condemnation costs had already reached $221.2 million, and that costs were rising.

So government officials should have known that the developer might request a greater subsidy. However, when the project was approved in December 2006 by the ESDC, the official documents cited only a $200 million subsidy pledge.

The $105 million increase was announced only in January 2007, after the project had been approved. Had the expected increase in subsidy been made public earlier, would the project have faced more protest?

City money for *new* acquisition of land?

Did the city make clear that the public funding would go to reimburse Ratner for properties already purchased? Not quite. A hearing last year of the City Council Committee on Finance/Economic Development included this exchange between Council Member James and NYCEDC's Seth Pinsky:

JAMES: The other $100 million, which is unspecified and is basically one big pot; what is that $100 million for? Does anyone have any idea?

PINSKY: The $100 million will be exclusively for acquisition of land, to reimburse or pay for new acquisition of land for the project. None of it will go towards condemnation.

Pinsky’s language was not inaccurate, but a little disingenuous, since the $100 million will not be used for new acquisitions, and he was in a position to know that, though he may not have known yet. A look at the list of properties purchased as part of the Arena Land shows that all are on the map of properties owned or controlled by the developer as of 11/1/06.

Generous developer?

Given that it’s now clear that the money would be used for reimbursement rather than new purchases, now we know that the seemingly generous payments made by the developer depended on taxpayer support. (The property owners had another reason to deal, of course: the threat of eminent domain.) So when project supporters like Errol Louis claim that some property owners were “newcomers who made out like bandits,” they should consider the additional context. (More here.)

Even if it had been Forest City Ratner’s own money, the developer’s willingness to pay an apparent premium was also an opportunity to acquire land that would increase enormously in value thanks to the state override of zoning.

Liquidated damages for delays

The City Funding Agreement posits a convoluted schedule of liquidated damages should either the Arena or Phase 1 be delayed. (See Exhibit I, p. 265-70 of the PDF.) Essentially, it assesses penalties that are keyed to both the extent of delay and whether the delay begins sooner rather than later.

I asked Brooklyn Law School Professor David Reiss, who specializes in real estate law, to take a look at that section. He suggested that, while the schedule may seem generous, he couldn’t ascertain how fair the deal was, given that he hadn’t seen the whole document nor was he familiar with the overall finances of the deal.

Liquidated damages, he explained, are a common solution in real estate deals, offering advantages to both sides--guaranteed calculation of damages vs. predictable costs, plus the opportunity to avoid litigation.

“The developer seems, as far as I can tell, to have a very long period (as reflected in the various Outside Dates provided for in Exhibit I) in which it has to do its work before the liquidated damages provisions kick in,” he commented. “The liquidated damages seem to come in two phases. A relatively modest phase (the first five years) and a more punitive phase (year six on) where the liquidated damages is at least twice as high as at the end of the first phase.”

“I would also note that the liquidated damages for the Arena being late are significantly higher than for Phase I being late (the latter being roughly five times higher),” he added.

(Note that the schedule at right does not apply directly to the damages the developer would have to pay; rather a "multiplier," beginning at 2%, would be applied, thus resulting in significantly lower payouts.)

“These liquidated damages provisions seem to provide significant redress to the City if the Developer deviates from the plans of, delays, or terminates the Project," he concluded. "Determining whether the amount of redress is proportionate to the overall size of the Project is beyond the scope of my analysis.”

Indeed, my suggestion is that the redress seems rather modest.

A delayed arena

The document gives an example of a late arena. It assumes that Year 0--the date of first funding --begins on August 15, 2007 and the Effective Date--the date by which “all litigation... shall have been sufficiently concluded so as to permit such financing and construction to proceed.... [and] ESDC has acquired and delivered vacant possession of the Project Site”--does not occur until November 10, 2014. (That assumes a much longer litigation process than most people expect.)

That means the Arena Outside Date--six years later--would be November 20, 2020, Year 13 after the initial funding. Upon that Arena Outside Date, the developer would have to deliver an Arena LOC (Letter of Credit) equal to three years of Liquidated Damages. That Arena LOC is calculated by applying a multiplier (2% for the first year, 3% for the second, etc.) to Column B of Schedule A. Thus the LOC would be the sum of the first three years, or 2%+3%+4% of the Column B amount, or $14,850,000. That would be the total due if the arena were three years late.

(If you click on the graphic to enlarge, the sum of $14,850,000 should be visible under the first shaded section. The bottom shaded section has two lines. The Total Due Upon Substantial Completion is $103,950,000, while the Total Less Arena LOC Amount is $89,100,000. Note that the Total Due assumes an arena eight years late, rather than three, and that the sum due increases steadily for the first six years, then doubles.)

The dates in the above example are not necessarily realistic. First, the date of the first city Disbursement was 2/22/08, NYCEDC's Patterson confirmed, so we're in Year Zero. Also, the Effective Date more likely would occur in 2009 or 2010.

Assuming the delivery of property via eminent domain by 2009, the Arena Outside Date would be six years later, in 2015, Year 7. That means the multiplier would be applied to $115,000,000, according to Schedule A, not $165,000,000. Thus an arena delayed until 2018--three years late--could cost the developer a total of $10,350,000.

The State Funding Agreement also would require repayment of a portion, not yet established, of the $100 million from ESDC.

A delayed Phase 1

The document gives an example of a delayed and partly complete Phase 1. It assumes that Year 0--the date of first funding--begins on September 25, 2007 and the Effective Date occurs on December 1, 2009.

That means that the Phase 1 Outside Date--12 years later--would be December 1, 2021, which is Year 14. For the purposes of the example, the developer has completed 1.1 million square feet, less than the 1.5 million square feet required.

The developer would have to deliver a Phase 1 LOC (Letter of Credit) equal to three years of Liquidated Damages. That adds up to a little more than $2.6 million. As the example shows, if the additional 400,000 square feet is not finished within ten years, the total damages would be $29.3 million.

(If you click on the graphic to enlarge, the sum of $2,638,350, the Phase 1 LOC, should be visible under the first shaded section. The bottom shaded section has two lines. The Total Due Upon Substantial Completion is $29,315,000, while the Total Less Phase 1 LOC Amount is 26,676,650. Note that the full chart assumes Phase 1 to be ten years late, rather than three. Note that the sum due increases steadily for the first six years, then doubles.)

Note that a “completion multiplier” diminishes the amount owed by 53.3% or nearly half. Thus, if Forest City Ratner were to build none of Phase 1, the completion multiplier would be 1 and the damages roughly double each year: about $5 million over the first three years, plus another $12 million over the next three years.

So an 18-year delay after the Effective Date--the 12-year grace period, plus six years of delays that would generate penalties--means the developer could sit on the project until 2027 and pay only $17 million to the city.

That's not necessarily realistic, given the developer's promises and the inevitable pressure from city officials, but it is, according to the city document, possible. So it may give the developer leverage in either gaining additional subsidies or access to scarce affordable housing bonds.

The State Funding Agreement also would require repayment of a portion, not yet established, of State Funding Payments.

Liquidated damages for abandonment

And what if Forest City Ratner abandons the project? Well, the City Funding Agreement states that, if the project is abandoned or terminated before the Arena Outside date (6 years after the close of litigation and the delivery of property), the ESDC--not the developer--would repay the Disbursements, up to the $100 million total, to NYCEDC, plus Liquidated Damages. Again, the additional $105 million is not mentioned.

Depending on the date of abandonment, the Liquidated Damages could be modest. It’s not clear to me where those Liquidated Damages come from, but possibly from refunds to ESDC of state monies advanced to the developer.

For example, if the final disbursement of city funding occurs in 2010, two years after the first disbursement, and the project is abandoned by 2011, the Liquidated Damages would be calculated according to Year 3 in Schedule D, and would total only $8 million.

If the delay is one year longer, the damage total would leap to $29 million. (Note that Schedule B applies to a scenario in which the final disbursement occurs during the same year as the first disbursement; Schedule C applies to a scenario in which the final disbursement occurs one year after the first disbursement.)

The more than threefold jump between the penalties if the project is abandoned in the first three years and the penalties if it's abandoned in the following three years suggests that, should Forest City Ratner decide to ditch the project and sell the team to New Jersey investors--a scenario which, the Real Deal reported, is somewhat more plausible, despite the developer’s denials--the decision should be made in three years, by 2011.

It’s unclear to me what happens if the developer abandons the project after the arena is built. I queried NYCEDC’s Patterson: "What if the project is abandoned *after* the Arena Outside Date? Is there any provision for that, or does some other clause of the agreement apply?”

I got no answer, but the explanation may lie elsewhere in the documents. Still, it would be worthwhile to have NYCEDC officials answer some questions.

Questions unanswered

Several important issues raised in both city and state funding agreements have yet to be resolved, and the ESDC has so far been reluctant to provide details.

Neither set any deadline for the completion of the 11 towers of Phase 2; indeed, both documents, as in the excerpt from the City Funding Agreement at right, allow for the distinct possibility of the General Project Plan being amended.

A yet-unannounced completion date, the “Final Deadline,” according to the State Funding Agreement, will “take into account the need for satisfaction of Government Authorities’ obligations to the Project.”

What does “satisfaction of... obligations” mean? Given that the next paragraph in the state agreement cites “Governmental Authorities making available to the Project affordable housing subsidies then customarily available,” it seems that the Final Deadline depends significantly on such subsidies.

Right now, there are many projects competing for a limited supply of such subsidies. Forest City Ratner could successfully compete for such subsidies. Or the supply could be increased. For now, however, the issue is murky, which may be why no Final Deadline has been announced.

Revisiting that May 2004 Daily News scoop about Ratner's generous buyouts

On the front page of the 5/14/04 New York Daily News, the headline proclaimed "BONANZA."

The headline on page 5 was no less breathless: "FOR THESE CONDO OWNERS, B'KLYN NETS ARENA DEAL IS . . . SLAM DUNK; RESIDENTS GET A COOL MIL TO GET OUT OF RATNER'S WAY."

Now that we know that taxpayers will pay for nearly all the private property developer Forest City Ratner purchased in the arena block, including the building pictured, it's worth looking back at the article and, with hindsight, revising selected paragraphs.

It would have been a different kind of scoop.

Some revisions


Real estate tycoon Bruce Ratner is showing Brooklyn homeowners the money.

Revised: Real estate tycoon Bruce Ratner is showing Brooklyn homeowners taxpayers’ money.

He's turning residents of one building into instant millionaires so they'll go quietly - letting him knock down their homes to make way for his controversial $2.5 billion Nets arena and housing complex.

Revised: Taxpayer funds are turning residents of one building into instant millionaires so they'll go quietly - letting him knock down their homes to make way for his controversial $2.5 billion Nets arena and housing complex.

That means people who paid about $600,000 for a swank three-bedroom, 1,300-foot condo just last year are being offered a cool $1.2 million to flee.

Revised: That means people who paid about $600,000 for a swank three-bedroom, 1,300-foot condo just last year are being offered a cool $1.2 million to flee. While it looks like the developer was being generous, the enormous increase in development rights made it worthwhile--even if he had to pay, which he doesn’t.

..."It's a lot of money," said another woman, who did not want her name used, citing an internal building pact to keep mum about the deal.

Nearly all the 30 owners in the eight-story condo - a renovated warehouse called the Atlantic Arts Building - are negotiating with Forest City Ratner.

One holdout remains.

Revised: One holdout remains. That holdout, Daniel Goldstein, became spokesperson for Develop Don’t Destroy Brooklyn, and has been responsible for--take your pick--helping delay the project through litigation and helping blow the whistle on a sweetheart deal.

"They're kind of mimicking what they did at MetroTech, which is to treat people equitably," said Atlantic Arts Building developer Marc Freud, referring to the downtown Brooklyn office and university complex Forest City Ratner built in the early 1990s.

Revised: "They're kind of mimicking what they did at MetroTech, which is to treat people equitably," said Atlantic Arts Building developer Marc Freud, referring to the downtown Brooklyn office and university complex Forest City Ratner built in the early 1990s. Equitable treatment in this case is eased by the public's money. And those taking the buyouts also knew that eminent domain loomed if they didn't deal.

Tuesday, April 29, 2008

Ratner lowers our architectural expections; will Gehry ease away?

Yes, the "news" (as hinted by the New York Observer) from the fairly gentle profile NY1 ran last night of Bruce Ratner is that the Atlantic Yards developer is talking populism, not Gehry-ism:
“We need jobs, we need shopping that's appropriate and the right price and quality goods, we need supermarkets that provide food that is of quality and well-priced, we need housing, and you know what? The architecture is important, but it's not that important,” says Ratner.

"I want to do great architecture, but I have to say something, which is that, if one is going to boil life down to architecture, then you know what? It's not for me,” he adds.


Pending estrangement?

Interviewer Budd Mishkin, host of the "One On 1" series, didn't raise the suggestion, but to me it hinted as a potential estrangement from Frank Gehry. (Gehry's not mentioned at all in the piece, though models of his buildings are evident and, of course, such video segments are edited.)

After all, Ratner not so long ago was emphasizing his commitment to architecture: "I’ve been talking for ten years about trying to use ‘design architects’ instead of ‘developer architects," he told New York magazine's Kurt Andersen in 2005. (Citation below.)

Gehry's never designed an arena, so to him that may be the prime lure of the Atlantic Yards commission. Given that most of the project, including the Miss Brooklyn tower (which Gehry called "my ego trip"), has been delayed and layoffs have occurred in Gehry's office, it's possible that Gehry--who has publicly said that typically he'd bring in other architects to work with him--sees a light at the end of the tunnel.

Ratner is now talking about housing and jobs and big box shopping, not architecture.

(The profile offered a look at Ratner in his earlier days, right, as well as a reasonable survey of his life and career.)

Some ironies

Oddly enough, Ratner was making his point while in the invitation-only Atlantic Yards Information Center, behind closed steel doors on the third floor of the Atlantic Center mall, where he's already apologized for the architecture. ("It's not something that we would build again," he told the New York Times in 2004.)

And given that Atlantic Yards would have relatively little retail--and none of the big box stores (at least according to former project executive Jim Stuckey) in the two malls--it was a bit of a nonsequitur.

But earlier in the piece he defended the malls:
"I'm proud of both of these, because the jobs they create number one and number two they save people money and allow people to buy good quality goods at lower prices and this serves a large part of Brooklyn. So, you know, those who focus on the architecture are frankly misguided about what's really important in this world,” says Ratner.

Mishkin suggests another irony:
It’s ironic [that Ratner has been the subject of protests], because he himself has taken to the streets to protest, before the start of the Iraq war, and especially during his Columbia Law School days in the ‘60s.

Actually, it's not so ironic. More ironic is brother Michael Ratner's committed activism while supporting machine politicians who might help Forest City Ratner.

Also ironic is coupling a scene of the signing of the Community Benefits Agreement, a private deal outside the purview of government (though Mayor Mike Bloomberg was a witness), with Mishkin's narration:
Ratner says his agreement with the city requires him to build low- and moderate-income housing and he believes the Atlantic Yards project will create jobs.


The question is not whether Bruce Ratner thinks a project getting significant subsidies will create jobs, but whether the special benefits are worth it.

Saving Brooklyn

Ratner gets to make the point that Brooklyn has changed significantly:
"I could remember initially when we built the MetroTech, there were bullet halls in the glass in the office buildings where the workers were and it was a very difficult sell to get companies to decide to move to Brooklyn as opposed to moving out of the state,” says Ratner.


It's an explanation for why MetroTech was designed the way it was, and a lot of people give Ratner more slack for MetroTech than a project like Atlantic Yards. What's left out of the NY1 profile, regarding MetroTech, the Atlantic Terminal and Atlantic Center malls, and Atlantic Yards, is how Forest City Ratner leverages public subsidies, tax breaks, and other benefits to build its projects.

The piece concludes:
“Nobody even knows I was consumer affairs commissioner, so you know what? I'm not building the stuff for legacy,” says Ratner. “I'm building it because I think that doing the residential we're doing, bringing the arena, bringing the team is important, and when it's built I think that'll be realized.”

Ratner can say all he wants about whether the project is "important," but the words of his cousin Chuck Ratner also deserve notice: "It's a great piece of real estate."

Ratner's conversion, in New York magazine

A look back shows how Ratner's embrace of starchitecture was saluted by critics, albeit sometimes with skepticism. (All emphases added.)

Kurt Andersen's 11/20/05 New York magazine Imperial City column, was headlined Delirious New York: Our long architectural snooze is over, thanks to neomodernist mania and the arrival—finally—of Gehry. Brooklyn should embrace him. It sure sounded like Ratner was with the program:
Until now, most of Ratner’s buildings have ranged from the uninspired to the bad, like his shopping center across from the Atlantic Yards. Even he admits the Atlantic Center mall is “not up to snuff. Philip Johnson did a first design, but I made a decision not to use him. I have to blame myself. I’ve been talking for ten years about trying to use ‘design architects’ instead of ‘developer architects.’ ”

Why does he think New York was so bereft of exciting large-scale architecture for so long? “It’s something I ponder a lot,” he says. “So mediocre.” ...

Given Ratner’s track record, I asked Gehry if at first he mistrusted Ratner’s professed new dedication to quality and innovation. “Yeah. Yes, I did.” And how did he get over his skepticism? “I’m still getting over it,” he says, although so far, “the budget busts have not been architectural ones. He’s always voted with me on the side of the architectural. He runs into roadblocks sometimes in his company, but it has not been cataclysmic.”

Ratner isn’t spending 15 percent extra on these new buildings simply because he wants to underwrite cool design. He understands that in Brooklyn, just as his quotas of apartments for poor people and construction jobs for women and minorities were ways of winning over key constituencies, hiring Gehry was politics by other means, sure to please the city’s BAM-loving chattering class. “The spirit of what you say,” Ratner agrees when I posit this theory, “is accurate.”


In the Times, a "conversion"

In Nicolai Ouroussoff's 7/5/05 New York Times essay, headlined Seeking First to Reinvent the Sports Arena, and Then Brooklyn, the critic suggested that the developer had undergone a "conversion":
By comparison, Forest City Ratner Companies, a relatively conventional developer known for building Brooklyn's unremarkable MetroTech complex, has seemingly undergone an architectural conversion, entrusting a 7.8-million-square-foot project to a single architectural talent who is known for creating unorthodox designs.

It seems like a gutsy decision. But Bruce C. Ratner, the company's chief executive and the development partner of The New York Times in building the newspaper's new headquarters in Manhattan, has apparently realized that the tired old models are no longer a guarantee of cultural or financial success. He seems willing, within limits, to allow Mr. Gehry the freedom to play with new ideas.


In Ouroussoff's 6/4/06 Times essay, Skyline for Sale, the critic assessed the embrace of top-name architects by bottom-line developers and came away somewhat skeptical, though he again used the term "conversion":
If Bruce Ratner's recent embrace of high-end architecture has some New Yorkers rolling their eyes, he can't be all that surprised. Not so long ago this developer's most visible cultural contribution to the city was a few kitschy theaters on 42nd Street. In Brooklyn he is known mainly as the creator of Metrotech, a complex of overblown yet banal office towers that seem to crush the life out of the city around it.

And even Mr. Ratner admits that, as a Brooklyn-based commercial builder, he once ranked at the bottom of the city's architectural food chain.

But in recent years he has sought vigorously to polish that image. His conversion began six years ago, when he joined The New York Times Company in selecting Renzo Piano — an architect known for the refinement of his buildings — to design a new Times headquarters in Midtown Manhattan. And it gained traction when Mr. Ratner handed Frank Gehry — whose celebrity has reached the point where he now has a signature jewelry line at Tiffany — the commissions for Atlantic Yards...


Now, our expectations are lowered.

Congestion pricing failure may delay BRT; Flatbush route not yet on the agenda

The failure of congestion pricing threw a bit of a wrench in the city's plans for Bus Rapid Transit (BRT), suggested as one solution to congestion on Flatbush Avenue, but now apparently several years away.

Though Flatbush is an obvious candidate for such service--which would have a dedicated express lane, fewer stops, offsite payment and "honor system" entrance (subject to random check), staggered stoplights, and back boarding, according to the city's pilot in the Bronx--another obvious candidate, Nostrand Avenue, was selected in 2006 for one-per-borough pilot project. It looks to be about four years away, however.

(Here's the Metropolitan Transportation Authority's site on the service, though the map for a proposed Flatbush Avenue route, at right, is no longer available.)

The PlaNYC 2030 Progress Report issued last week explains the fate of BRT, now dubbed Special Bus Service (SBS):
The first SBS corridor, on Fordham Road in the Bronx, is set to begin service in June 2008. The remaining four SBS services had been planned to start over the next few years, but relied on federal funds contingent on congestion pricing. The City is now pursuing additional funding sources, but the SBS projects may be delayed by the loss of Federal funds.


(Nearly one-third of the $354 million in federal funds was to go to BRT, according to an essay last week in Gotham Gazette. Map from MTA's Project Update.)

A PlaNYC "scorecard" clarifies that the other four SBS services are planned to be introduced by 2011. That's likely too late to start up a Flatbush Avenue version by 2010, the unreliable official target date for opening the Atlantic Yards arena, or even 2011, which I consider the likely best-case scenario.

Brooklyn BRT in 2012?

In fact, the Metropolitan Transportation Authority contradicts the PlaNYC document, estimating on its SBS FAQ page that the Nostrand Avenue route would be implemented in 2012. Though that's subject to change, it's a good bet that a Flatbush Avenue route would be at least a year after that.

Would that be in time for an AY arena? Then again, developer Forest City Ratner has six years--after the close of litigation and the transfer of property via eminent domain--to build the arena without penalty.

(Slide at right and two similar slides below from Re-imagining Bus Service in New York: Select Bus Service and the Better Bus Program, by Janette Sadik- Khan, Commissioner, NYC DOT and Howard H. Roberts, Jr., President, MTA NYC.)

Funding available?

Is there money? The scorecard explains:
This program was previously funded through the Urban Partnership Agreement (UPA) between the City and the U.S. Department of Transportation. Since these funds were contingent on approval of congestion pricing by the State Legislature before April 7 2007, DOT and the MTA are now pursuing federal New Starts funding to implement these corridors.


Is it really rapid?

What's BRT? The Tri-State Transportation Campaign has a comprehensive web site that covers its implementation in several cities. Note that Curitiba, Brazil, and Bogotá, Colombia are among the leaders in this effort.

The city's use of the term Special Bus Service, which may be more accurate than Bus Rapid Transit, has been targeted by some critics; blogger Cap'n Transit points out that "the primary factor is right-of-way, and the single most important feature is physical separation of the right-of-way."

Also, the city and MTA are not yet ready to use buses with extra doors specifically designed for BRT.

BRT for Flatbush

Several commentators on the Atlantic Yards Draft Environmental Impact Statement, including project supporters like Brooklyn Borough President Marty Markowitz, advocated that Bus Rapid Transit (BRT) be implemented along Flatbush Avenue to help cope with the inevitable crowding further exacerbated by the Atlantic Yards project.

The Empire State Development Corporation, in response, pointed out that Nostrand Avenue, not Flatbush, had been selected for the Brooklyn pilot:
Though studied, there are no present plans to implement a pilot bus rapid transit program along Flatbush Avenue. The proposed project, including the proposed lay-by lanes adjacent to the arena block, is not expected to preclude the installation of bus rapid transit lanes or stops should they be considered in the future….

More routes needed

In a Gotham Gazette essay last week headlined Bridging New York's Transit Gap, Joan Byron of the Pratt Center for Community Development described an expanded version of BRT--including a Flatbush Avenue route--as an equity issue, helping poorer New Yorkers in areas not served by subways to lessen their lengthy commutes to work:
BRT will create an efficient no-transfer option for hundreds of thousands of people whose mobility is now limited to the radius a conventional bus can cover at a speed of 7.9 miles per hour.
(Click to enlarge map)

She adds:
Meanwhile, a small but growing number of transit advocates and riders who know what BRT is are clamoring for more routes. COMMUTE! (Communities United for Transportation Equity), a coalition of community groups coordinated by the Pratt Center for Community Development, wants the BRT routes to cross bridges and connect the boroughs, making buses a more serious complement to the subway system.


She concludes:
With both the one-time shot of federal funding and the projected $500 million per year in net revenues from congestion pricing off the table for the moment, BRT may be more important than ever. The MTA Capital Plan has, in words of Straphangers Campaign spokesman Gene Russianoff, "more hole than plan," with less than $12 billion of a five-year, $29 billion shopping list accounted for. As the rail and subway projects envisioned in that plan recede into the future, BRT makes more sense than ever. It will not prevent us from building light rail or subways in the future, but for now it makes intelligent use of the infrastructure we already have - our streets.

Indeed, COMMUTE! advocates a much more aggressive program, calling BRT "An Affordable Solution for Transit-Starved Communities":
Launch as many BRT routes as possible, as quickly as possible. Five routes are not enough, and neighborhoods with high concentrations of people with long commutes should be the priority for BRT.


And here's a critique of the COMMUTE! plan, from the blogger Cap'n Transit.

Monday, April 28, 2008

The PlaNYC 2030 housing update and the contradictions of AY

When PlaNYC 2030 was announced last April, I pointed out how Atlantic Yards was conspicuously absent as an example of how to build new housing, even though the plan promotes the identification of underutilized areas across the city that are well-served by transit and the exploration of opportunities to create new land by decking over rail yards, rail lines and highways.

Given that the project remains high on the mayoral agenda, the omission was curious, I noted--though I'd add today that there is a built-in excuse; as a state project, the city can claim that it has no power over the rezoning.

Gaps in the Progress Report

The PlaNYC 2030 Progress Report issued last week also understandably leaves Atlantic Yards off the maps of city-initiated rezonings (above) and rezonings with inclusionary zoning (right).

But both maps deserve some footnotes. The map at top shows a significant segment of west-central Brooklyn rezoned. The lighter-colored and irregular piece of that segment is the Downtown Brooklyn rezoning. Atlantic Yards, not a rezoning but a state override of city zoning, would be to the southeast.

Also note the contrast between the two maps; absent from the second map are rezonings that, had the city been more wise, would have featured inclusionary zoning, which trades additional square footage for affordable housing. Given that the rezonings in Downtown Brooklyn and along Fourth Avenue in central Park Slope gave significant value to property owners who could then build much bigger, it was a reasonable tradeoff.

In the case of Downtown Brooklyn, most observers and advocacy groups seem to have dropped the ball, as the New York Observer pointed out in May 2006. In the case of Park Slope, affordable housing advocates like City Council Member Bill de Blasio made the case for inclusionary zoning, but city officials resisted.

Expanding the supply

Atlantic Yards, though not a rezoning, would seem a parallel with two elements of the city's plan: rezonings in areas near transit and construction on public land. The progress report states:
Rezonings in transit-oriented areas are expanding potential supply as well; rezonings adopted since 2005 could result in more than 36,000 new housing units, including 5,200 in the Jamaica rezoning alone and anticipated rezonings could facilitate over 35,000 new units.

This last fiscal year, we started almost 1,700 units of affordable housing on public land.


This provides some context for Atlantic Yards, with its projected 6430 units, including 2250 rentals, plus perhaps 600-1000 affordable for-sale units. AY, which would include more than a half-million square feet of office space (the equivalent, perhaps, of another 500 apartments) would be over approximately [corrected] six (large) blocks.

The Jamaica rezoning, which includes both downzonings to preserve scale and upzonings to increase development rights, would produce 5200 new units and 3 million square feet of commercial space (the equivalent, perhaps, of another 3000 units) over 368 blocks.

In other words, AY would be packing a lot in.

The contradictions of AY

That's why veteran community planner Ron Shiffman, founding director of what is now the Pratt Center for Community Development (and a board member of Develop Don't Destroy Brooklyn) might have been seen to contradict himself when speaking at a discussion last Wednesday on PlaNYC hosted by the NY Metro Chapter of the American Planning Association. (Here's more on the panel.)

On the one hand, he supports "spatial equity," so that low- and moderate-income people have places to live throughout the city and also transit-oriented development, density near public transportation. Both are arguments for Atlantic Yards.

On the other hand, he pointed out, affordable housing should be based not on regional median income but local median income, so it's not out of the reach of neighborhood residents. (That criticism applies not just to Atlantic Yards but to all affordable housing developments.)

He also argued that inclusionary zoning should be mandatory, not voluntary, which removes the possibility of "zoning for sale," an accusation lodged against AY, which is essentially a privately-negotiated (by developer Forest City Ratner and ACORN) affordable housing bonus.

He further contended that "inclusionary zoning should not be a wedge issued used by a developer," a reference to how Atlantic Yards has polarized groups in Brooklyn.

Finally, he pointed out how he and others "fought desperately" against the "suburbanization of our communities," the construction of single-family homes, some detached, in places like the South Bronx and East New York. Those were efforts to establish a working-class presence in formerly devastated areas, and they worked, but they didn't allow room for growth that the transit infrastructure could support.

"Today, said Shiffman, "we see proposals that far exceed" the social, cultural, and physical infrastructure. "We need to increase density, but with a sense of the carrying capacity," so that communities are livable. Though he didn't say the words "Atlantic Yards," that's been his critique of the project.

PlaNYC gets praise from planners, but momentum must be sustained

While an April 14 panel consisting of community representatives and planners offered mild praise for and much skepticism toward Mayor Mike Bloomberg’s PlaNYC 2030 sustainability initiative, an April 23 discussion, sponsored by the NY Metro Chapter of the American Planning Association, was far more positive, though participants suggested several areas for improvement.

NY Metro Chapter President Ethel Sheffer called it “this terrific initiative” and, indeed, there was generally positive reaction. The city released a PlaNYC progress report the day before. The press release stated 117 of 127 initiatives (93%) are in progress, and about 70 percent of PlaNYC initiatives can be accomplished by the mayoral administration, while the request require cooperation from other levels of government.

“From turning our yellow and black cabs to green, beginning to plan the 8 regional parks that were never finished from the Robert Moses era, and planting more than 50,000 trees as part of our MillionTreesNYC effort, New York City is making big strides in becoming one of the greenest cities in the World," Bloomberg said in the press release.

Other highlights include:
  • a new landscaping requirement for commercial parking lots
  • 60 miles of bicycle lanes and roughly 800 new bicycle parking rack
  • an Executive Order codifying the Bloomberg Administration’s goal to reduce its energy consumption by 30 percent by 2017
  • an RFP for the installation of 2 megawatts of solar capacity on City-owned buildings
  • the incorporation of green building concepts, such as reflective roofs, into the new Construction Code.

Some critique

In a report issued last week, Building a Greener Future: A Progress Report on New York City’s Sustainability Initiatives, the New York League of Conservation Voters Education Fund praised the mayor but suggested that, “despite the significant progress made in the last year, much still needs to be done.”

It offered six priorities:
  • Approve legislation that codifies the Office of Long-Term Planning and Sustainability in the city’s Administrative Code.
  • Work with the City Council to amend the City Charter to require the City to spend an amount equal to 10 percent of its energy expenses in energy-saving measures.
  • Create an office to assist building owners in converting to green technologies.
  • Include a measurement of every agency’s energy consumption and savings in the Mayor’s Management Report.
  • Fully staff the proposed Office of Environmental Remediation and create a unified planning infrastructure to guide the development of new open space projects.
  • Create a variable-price parking program that would increase the price for street parking in the Manhattan Central Business District during peak hours, begin a comprehensive study of the parking requirements in the Zoning Resolution and increase city funding for the MTA.
At the panel

At the panel, describing the city’s progress, Ariella Maron, Deputy Director, Office of Long-term Planning and Sustainability, NYC Mayor's Office of Operations, was particularly enthusiastic about several measures, including rules that all new taxis be hybrid by 2012. “It’s looked in law, it’s happening, it’s fantastic.” Also, she said, “it’s amazing” how city agencies have embraced various initiatives.

While community representatives expressed unease at the earlier panel about the longevity of some initiatives, Maron said, “We’re working very hard to codify as much as possible,” including a bill that puts sustainable planning into law.

Beyond the specific governmental initiatives, Maron noted, individual New Yorkers can take several steps themselves, summarized on the GreeNYC page, including shifting to online bills, shopping with cloth bags rather than plastic, and unplugging electrical outlets.

Housing issues

Despite Bloomberg’s efforts, the housing shortage is going to increase, warned Jerilyn Perine, Executive Director, Citizens Housing and Planning Council. She described how city investment in the 1980s and 1990s “helped build a marketplace” and attract private capital, but most new construction was unaffordable to the average New Yorker. Less than 25% of available apartments are affordable to New Yorkers at the median income

More singles live in New York, and more life with fellow adults, thus leading to the now-typical post-college mutliple-roommate situation, where clusters of unrelated people, each with their own income, compete with nuclear families for larger apartments.

While 8% of households were doubled up with families or friends in 1996, the number grew to 10% by 2005. Worse, more than 29% of households paid 50% or more of their income in rent in 2005.

Perine suggested that one solution might be to rethink density, not in terms of the size of buildings--which is what generates neighborhood opposition--but the interior design.

“We live at a palatial standard” indoors compared to most of the world, she said. While that may not be true for those packed into studios in Manhattan, she noted that zoning requirements even for supportive housing--where single adults could live in one room--require 600 square feet for apartment.

While inclusionary zoning can deliver more housing, she said, it’s unrealistic to think the city of New York can provide enough units on its own; the federal government needs to help.

Praise and caution

Veteran community planner Ron Shiffman, founder of what is now the Pratt Center for Community Development, He agreed with Perine: “We desperately need to get the federal government back in the business of building housing.”

Shiffman said he applauded the city and mayor for the plan, a “very bold vision... that needs a great deal of support.” That was the context, he said, with which his criticisms should be seen.

He said the city had to “build the base within communities” to support the plan. He said the plan didn’t engage equity and social justice, such as access to affordable housing and transportation. (His comments about housing could be seen as supportive of but ultimately critical of projects like Atlantic Yards.)

He said the city needs to be part of the “second industrial revolution,” producing green products within its borders.

Mobilizing the public

Marcia Bystryn, Executive Director of the NY League of Conservation Voters, saluted Bloomberg for “the precision and rigor with which he has proceeded.” While others have expressed dismay that the sustainability plan was linked to economic development, warning of the city’s sympathy to developers, Bystryn suggested that it rather recognized the centrality of the issue.

"It’s critical” to mobilize the public so sustainability is part of the agenda for the 2009 mayoral election, she said. Even without congestion pricing, she said the city could do certain things on its own, such as revising parking policy (an issue I’ll look at separately).

Where’s the money?

Without funds from congestion pricing and federal aid, there’s a significant lack of funds for infrastructure; Bystryn cited a “chasm” between available funding and the MTA’s capital plan.

Shiffman suggested a solution for the city’s loss in revenues: reinstituting the stock transfer tax, which New York City adopted in 1966 but phased out in 1978. Here’s an IBO report that offers several cautions, at least regarding the version as proposed in 2003. Here’s a more recent article making the case.

Sunday, April 27, 2008

Flashback: in 2005, the Times reported project completion by 2011

Remember this front-page New York Times article?


The article was flawed for all sorts of reasons, notably the claim that the arena was instantly gaining a skyline. (See the skyline announced in December 2003 here.) Instead, revised designs were being released, exclusively to the Times.

But a second look shows the real whopper below.

Well, 2008-9 for the arena is of course way off. At the time, it was highly unlikely though not completely implausible, assuming a smooth environmental review process and no lawsuits.

2011: a fantasy

But could the entire project have been completed by 2011? That's ridiculous, given that the developer claimed when Atlantic Yards was announced in 2003 that it would take ten years to build.


(That statement was in a Project Overview handed out to the press; however, a different Times reporter covered that press conference and the timetable was not cited in the Times's 12/11/03 coverage.)

Ten years, of course, was the "anticipated" time frame in the General Project Plan approved in 2006 by the Empire State Development Corporation, with Phase 1 completed by 2010. Of course, we now know (though the Times hasn't reported it), that the developer has 6+ years to build the arena, 12+ years for Phase 1, and an indeterminate time for Phase 2.

Correction needed

Maybe the Times quoted Stuckey accurately, but he was blowing smoke. Or maybe the Times misquoted him in some way

Either way, the Times should both correct the record and ensure that those perusing the newspaper archive understand that 2011 was never a plausible target.

Tougher on the Times?

A reader asked me if I was harder on the Times than other journalistic outlets that make factual errors in their AY coverage. The answer is yes. The Times is the "Paper of Record," or at least is/was perceived to be, and it's where researchers typically search. In the case of Atlantic Yards, the Times certainly shouldn't be the only source consulted.

Saturday, April 26, 2008

De Blasio claims AY would have 3000 low-income units

In an interview in the Spring issue of the Park Slope Reader, City Council Member Bill de Blasio, who's running for Borough President, shows he hasn't improved his due diligence regarding Atlantic Yards.

Notably--unless he was misquoted--he claimed that the project would include 3000 low-income housing units, a significant overstatement.

Actually, the plan is to include 900 low-income rental units--at 30-50% of AMI (Area Median Income)--among 2250 affordable rentals, and 600 to 1000 for-sale affordable units, of which a "majority... will be sold to families in the upper affordable income tiers," according to the Housing Memorandum of Understanding Forest City Ratner signed with ACORN. That means households with six-figure incomes, perhaps needing a boost in New York, but hardly low-income.There are no deadlines for the for-sale units, nor penalties for noncompliance, according to the State Funding Agreement.

Also note that the AMI, $70,900 for a four-person household, is based on a region that includes suburban counties. (The Draft Environmental Impact Statement for the Atlantic Yards project, in Chapter 4 (p. 34), cites the median household income for Brooklyn as $32,135 and for the city as $38,293. Those statistics come from the 2000 U.S. Census and thus are somewhat outdated--and also refer to households with an average household size of 2.6 people-- but they still suggest that Brooklyn's median income is significantly less than the regional AMI.)

The Q&A

Q. You’ve been a supporter of the Atlantic Yards project. Not all local residents agree with you on this. How do you see the evolution of this project in the future?

A. There’s still a lot of work to be done. I’ve supported Atlantic Yards because it will provide over 3000 units of affordable housing to low-income residents and it will bring more local jobs to the neighborhood. But I’m not happy about many aspects of the project as it exists today. Many of the buildings are too tall and can be lower; the scale of many of the buildings simply doesn’t fit in with the surrounding neighborhoods. A lot of mass transit issues still haven’t been addressed and no specifics have been offered: there will be a huge increase in traffic plus we’ll need additional bus lanes and more frequent subway service. Also, I’m not happy at the way Forest City Ratner has shut out the surrounding communities from the decision-making process. I feel that the Borough President office can have an impact on these issues, and that is one reason why I am running for Borough President.

If the buildings are too tall, the project would likely have to shrink, which would lessen the amount of affordable housing.

(Note that de Blasio has become more vocal in his criticism lately, and will be speaking at the "Time Out" rally next Saturday.)

Bonding delays

And, as de Blasio should know, affordable housing is dependent on a a limited pool of tax-exempt bonds. So a smaller AY or a different project (a la the UNITY plan concentrated on the Vanderbilt Yard) might not mean as much affordable housing at their specific sites--but the funding might be used elsewhere to build housing faster.

One question de Blasio should be asking--and asking himself--is why the project was approved with an "anticipated" ten-year buildout even though the lack of bonding capacity meant the schedule was highly unrealistic.

In other words, 900 low-income units over ten years means 90 units a year; over 20 years, that's 45 units a year, and over 30 years, that's 30 units a year. That's a far cry from 3000.

Other comments on development

Also, de Blasio called "the high-rise development on Fourth Avenue... a huge disappointment" because of the lack of affordable housing he fought for--a lesson the city has since learned, but too late for Park Slope. He did his due diligence on that issue.

On the other hand, he suggested that the office of the Borough President can "intervene case by case" to "negotiate with the developers and make sure their projects truly benefit the community."

Maybe, but wouldn't it be better to set some ground rules at the start?

The importance of context

The potential Borough President seems to be a supporter of context:
We can make changes in land use. With some buildings- and I am thinking about the apartment house on Warren Street and Fourth Avenue that my daughter and I walked by the other day- the architect did a good job; he made it appear that the building is a part of the existing neighborhood.

I am amazed that many developers are not aware of the need to make their buildings fit in to the neighborhood. I also think it’s good business, because attractive buildings promote neighborhood renewal. This, in turn, increases property values.


Frank Gehry's plan for Atlantic Yards (view from Dean Street east of Sixth Avenue, right) is not exactly about context. Supporters of this and other large developments might point out that a slavish adherence to context can be paralyzing.

How to mediate all this? It's not simple, but overblown claims about affordable housing shouldn't trump analysis.

All in the timing: "when" but not "if," says FCR (but not on AY.com)

From the FAQ page at the Atlantic Yards web site:

Obviously, ground hasn't been broken. And the plan, at least that passed by the Empire State Development Corporation (ESDC), may have been to phase construction over ten years, but it was hardly realistic. Now it's an impossibility, and the ESDC gives the developer a long leash. So the FAQ needs an update.

Promises of "when," not "if"

From a front-page Wall Street Journal article yesterday headlined Economy, Credit Woes Foil Cities' Big Projects:

One project being watched closely is Atlantic Yards, a $4 billion development that Forest City Ratner Cos. is building on 22 acres in Brooklyn, N.Y. After a number of court battles, the developer plans to finally begin construction on a new arena for the New Jersey Nets basketball team by the end of this year.

However, the schedule for its planned office tower, called Miss Brooklyn, likely be will pushed back until an anchor tenant is signed given the current market conditions, says Loren Riegelhaupt, a Forest City spokesman. He stresses that the entire project eventually will be built. "It's not a question of if, but when."


Well, the plan may be to break ground this year, but how can he be sure? As to whether the entire project will be built, well, there's no guarantee that housing subsidies will be available.

More importantly, the governmental authorities don't require the project to be built as approved; the State Funding Agreement includes a City Purpose Covenant that allows for the amendment of the General Project Plan and contemplates its abandonment for a smaller project. Maybe that's why Frank Gehry is laying off architects, as the Los Angeles Times reports on its blog.

Friday, April 25, 2008

Rally for AY "time out" to be held Saturday, May 3

No More Demolitions!
No More Changes to Infrastructure!
No More Subsidies!
No More Displacement of Residents and Businesses!


The "Atlantic Yards stall" has brought groups representing different flavors of project criticism and opposition together for a rally at 2 pm on Saturday, May 3, with a range of local political officials confirmed as attendees. The location is 752 Pacific Street near Carlton Avenue in the AY footprint, a block planned to hold "interim surface parking" that could last indefinitely. (The Brooklyn Paper broke the news, though the lead of the article says Sunday rather than Saturday and stresses stopping demolitions.)

The stated purpose--asking Gov. David Paterson for a "time out"--is certainly milder than the full agenda of Council of Brooklyn Neighborhoods (CBN) and Develop Don’t Destroy Brooklyn (DDDB). Indeed, DDDB restates its opposition to the project in its rally announcement.

What does the statement that "Brooklyn needs a new plan and community involvement" mean? It could mean the UNITY plan, which DDDB and CBN support, but it also could be a restatement of the position of more moderate coalition BrooklynSpeaks, which has taken a "mend it, don't end it" posture toward AY and has avoided joining any lawsuits.

BrooklynSpeaks, which has the expertise of the Municipal Art Society behind it, has proposed a new governance structure to oversee the project and has gained the support of several local elected officials who have expressed concerns about the project but have avoided standing with DDDB.

CBN and DDDB are petitioners in the pending appeal of the lawsuit--dismissed at the trial court level--challenging the state's environmental review. (DDDB has raised money for this and the eminent domain lawsuit, now on a longshot effort to get the Supreme Court to hear it.)

Potential impact

It's unlikely that Paterson would intervene regarding demolitions; after all, judges have previously been unwilling to intervene when FCR demolishes properties it already owns. As for displacement, that would mostly be a consequence of eminent domain--not yet exercised, but certainly on the Empire State Development Corporation's agenda. Will Paterson revisit his 2005 call for a moratorium on eminent domain?

If project completion requires more subsidies, as the developer asserts, then that may be the most critical issue at the rally. Does the developer deserve more subsidies to deliver promised public benefits on a specific timetable? Or was the promised ten-year buildout unrealistic from the start, as suggested by the long leash given for the arena and Phase I, with no timetable for Phase II? That's an issue, perhaps, for the upcoming Assembly hearing on megaprojects, which could look more carefully at plans and promises behind AY.

(Note that that FCR is in the middle of demolishing the Ward Bakery, a building many wanted to save, near the site of the rally, to create space for that "interim surface parking." It has taken no steps to tear down 24 Sixth Avenue, once filled with handsome condos and now being used for offices and temporary apartments, though it would be needed for the arena block. Should the project fail, the units could easily be resold.)

Elected officials

Two City Council Members who've generally supported the project, David Yassky and Bill de Blasio (both candidates for higher office), have ramped up their critical rhetoric and joined their Council Member colleague, project opponent Letitia James, in asking Paterson for a similar time out.

DDDB says several other elected officials have confirmed attendance: State Senator Velmanette Montgomery, State Assemblywoman Joan Millman, State Assemblyman Jim Brennan, State Assemblyman Hakeem Jeffries, the three Council Members mentioned above, and Council Member (and maverick mayoral candidate) Tony Avella.

While that group basically contains the local elected officials most concerned about the project rather than a huge base, they haven't previously come together for such a rally.

(Note that the rally location is outside a building owned by Henry Weinstein, a plaintiff in the eminent domain case and a party in a suit, so far successful, against his tenant Shaya Boymelgreen, who then assigned leases to Forest City Ratner.)